Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>On 4 September, Ecopro HN announced that it plans to conduct a rights offering capital raise of about 200 billion won. </li>
<li>The company plans to issue 5.67 million new shares and the expected rights offering price is 35,300 won (23% lower than current price). </li>
<li><em><strong>We would not subscribe to this rights offering mainly due to lofty valuations, declining sales and profit growth, continued negative free cash flow, and concerns about excessive shares dilution.  </strong></em></li>
</ul>


On 4 September, Ecopro HN announced that it plans to conduct a rights offering capital raise of about 200 billion won. 
The company plans to issue 5.67 million new shares and the expected rights offering price is 35,300 won (23% lower than current price). 
We would not subscribe to this rights offering mainly due to lofty valuations, declining sales and profit growth, continued negative free cash flow, and concerns about excessive shares dilution.  


Ecopro HN: Rights Offering of 200 Billion Won

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Equity Capital Markets

<ul>
<li>Ecopro HN announced a ₩200 billion rights issue, offering 5.67 million shares (a 40% capital increase) with a stockholder allocation rate of 0.3 per share.</li>
<li>The extended timeline likely results from the issuer's 20% discount push, with Daishin, an underdog banker, extending it to boost subscriptions despite risking price stability.</li>
<li>The strategy is to time entry when the stock rights and subscription costs create a solid spread versus the spot price, despite increased volatility making price predictions harder.</li>
</ul>


Ecopro HN announced a ₩200 billion rights issue, offering 5.67 million shares (a 40% capital increase) with a stockholder allocation rate of 0.3 per share.
The extended timeline likely results from the issuer's 20% discount push, with Daishin, an underdog banker, extending it to boost subscriptions despite risking price stability.
The strategy is to time entry when the stock rights and subscription costs create a solid spread versus the spot price, despite increased volatility making price predictions harder.


Key Things to Watch in Ecopro HN's Big Rights Offering

Cross Asset Strategy

<ul>
<li>There are some major surprises (both inclusions and exclusions) in the Korea Value Up index. </li>
<li>In particular, the telecom sector (SK Telecom and KT) and large cap holding companies (Samsung C&amp;T and LG Corp) are surprising exclusions in the index.</li>
<li>There are many surprising inclusions in the Korea Value Up Index. We provide 30 companies are surprising inclusions in the Korea Value Up Index (19 KOSDAQ and 11 KOSPI listed).</li>
</ul>


There are some major surprises (both inclusions and exclusions) in the Korea Value Up index. 
In particular, the telecom sector (SK Telecom and KT) and large cap holding companies (Samsung C&amp;T and LG Corp) are surprising exclusions in the index.
There are many surprising inclusions in the Korea Value Up Index. We provide 30 companies are surprising inclusions in the Korea Value Up Index (19 KOSDAQ and 11 KOSPI listed).


Korea Value Up Index - Surprising Inclusions and Exclusions

<ul>
<li>Samsung Electronics announced that it will revamp its executive compensation system to include treasury shares as incentives. Samsung has benchmarked TSMC in terms of paying treasury shares to its employees.</li>
<li>Samsung Electronics' decision to revamp its executive compensation system to include treasury shares as incentives aligns the interests of the shareholders along with the company's management.</li>
<li>Now that Samsung Electronics has incorporated stock based incentive system, it is likely that other Korean companies that could follow suit. </li>
</ul>


Samsung Electronics announced that it will revamp its executive compensation system to include treasury shares as incentives. Samsung has benchmarked TSMC in terms of paying treasury shares to its employees.
Samsung Electronics' decision to revamp its executive compensation system to include treasury shares as incentives aligns the interests of the shareholders along with the company's management.
Now that Samsung Electronics has incorporated stock based incentive system, it is likely that other Korean companies that could follow suit. 


Samsung Electronics: Revamping Executive Compensation to Include Stocks - Benchmarking TSMC

<ul>
<li>On 27 November, Ecopro BM (247540 KS) announced that it has filed an application for the transfer of listing from KOSDAQ to KOSPI. </li>
<li>Ecopro BM is currently the second largest company in KOSDAQ. At the current market cap, Ecopro BM will be the 34th largest company in KOSPI (in terms of market cap).</li>
<li>Lofty valuation is one of the main reasons why we continue to be bearish on Ecopro BM which is trading at P/E of 134x and P/B of 9.4x in 2026.</li>
</ul>


On 27 November, Ecopro BM (247540 KS) announced that it has filed an application for the transfer of listing from KOSDAQ to KOSPI. 
Ecopro BM is currently the second largest company in KOSDAQ. At the current market cap, Ecopro BM will be the 34th largest company in KOSPI (in terms of market cap).
Lofty valuation is one of the main reasons why we continue to be bearish on Ecopro BM which is trading at P/E of 134x and P/B of 9.4x in 2026.


Ecopro BM: Transfer of Listing from KOSDAQ to KOSPI Is Likely in 1Q 2025

South Korea

Ecopro HN Co. Ltd. operates as an environmental company. The Company provides environment engineering, environment consulting, and other related services. Ecopro Insight offers services throughout South Korea.

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Ecopro HN (383310 KS)

Ecopro HN: Rights Offering of 200 Billion Won

We would not subscribe to this rights offering by Ecopro HN mainly due to lofty valuations, declining profit growth, continued negative free cash...

Douglas Kim

Key Things to Watch in Ecopro HN's Big Rights Offering

This post highlights the key points to watch in Ecopro HN's sizable rights offering, which features a 40% capital increase.

Sanghyun Park

Korea Value Up Index - Surprising Inclusions and Exclusions

There are many surprising inclusions and exclusions in the Korea Value Up Index. We provide 30 companies that are surprising inclusions and 10...

Douglas Kim

Samsung Electronics: Revamping Executive Compensation to Include Stocks - Benchmarking TSMC

Samsung Electronics announced it will revamp its executive compensation system to include treasury shares as incentives, better aligning the...

Douglas Kim

Ecopro BM: Transfer of Listing from KOSDAQ to KOSPI Is Likely in 1Q 2025

On 27 November, Ecopro BM (247540 KS) announced that it has filed an application for the transfer of listing from KOSDAQ to KOSPI.

Douglas Kim

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